How Do Google Shopping Ads Work?

Shopping ads use your existing Merchant Center product data – not keywords – to decide how and where to show your ads. The product data we submit through Merchant Center contains details about the products you sell. Google then uses these details when they match a user’s search to your ads, making sure to show the most relevant products.

We manage your Shopping ads in Google Ads using Shopping campaigns, a flexible way to organise and promote your Google Merchant Center product inventory within Google Ads.

You can advertise your store and your products using 3 types of Shopping ads:

  • Product Shopping ads. These are created based on the product data that we submit in the Merchant Center.
  • Showcase Shopping ads. We’ll create these in Google Ads by grouping related products together. That way people can compare several of your products and click the right one.
  • Local catalog ads. These use feed data provided from local inventory ads to engage users on the Google Display Network, and help drive traffic to your local stores.


Just like other ad formats, your Shopping ads participate in an ad auction. Exactly how you’re charged works a little differently depending on your ad type, as follows:

  • Product Shopping ads are charged using cost-per-click (CPC), which is just when someone clicks your ad. So you’re charged only when someone clicks an ad that leads to the landing page on your website or to the Google-hosted landing page for your local inventory.
  • Showcase Shopping ads are charged using cost-per-engagement (CPE), which is when a user expands the collapsed ad and keeps it open for 10 seconds or more, or clicks on the expanded ad before then.
  • Local catalog ads are charged using CPE, as measured by scrolling, tapping, or clicking on the ad.

When we’re creating your Shopping campaign, you’ll decide how much you’re willing to pay for each click or engagement. You’ll only pay the minimum amount necessary to rank higher than the advertiser immediately below you, and you’ll often pay less than your maximum bid.

Here’s where you might see your Shopping ads across the web:

  • Google Shopping (in select countries)
  • Google Search, next to search results (separate from text ads) and Google Images
  • Google Search Partner websites (if your campaign is set to include search partners)
  • The Google Display Network

Your Shopping ads can appear at the same time as text ads, because Google wants to give shoppers access to the full variety of products that match their search. This means that shoppers can find the best match before clicking through to make a purchase, which might help you close the sale.

Source: Google

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Kevin is the founder of Your Digital Marketer and while he’s not working on client’s PPC campaigns he spends his time communicating with clients on a one-to-one basis to ensure that each client understands what their company can do to further improve their online presence.

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